Rank Group (RNK) H2 2006 earnings summary

Executive summary

• H1 2007 operating profit rose to £47.9m from £38.0m; adjusted profit before tax increased to £37.3m from £21.9m.

• Growth in bingo, casinos and interactive; cost-saving initiatives on track, with UK operations preparing for the Gambling Act 2005.

• Hard Rock disposal completed; £353m returned to shareholders via a special dividend.

Financial highlights

• Continuing-operations revenue was £284.6m vs £277.3m; operating profit was £47.9m vs £38.0m.

• Adjusted profit before tax was £37.3m vs £21.9m; adjusted EPS was 5.2p vs 2.4p.

• Operating cash inflow was £64.8m vs £18.7m; net debt was £293m, down from £447m at 31 December 2006.

• Statutory profit before tax was £49.7m vs £1.1m; profit for the period was £341.8m vs £9.6m, including discontinued operations.

Outlook and guidance

• Strong H1 performance; H2 expected to be more challenging due to the UK smoking ban and loss of Section 21 terminals.

• The Gambling Act 2005 was expected to create growth opportunities through relaxed advertising restrictions, new games and expanded gaming provision.

• FY 2007 capital expenditure forecast at £40m–£50m: bingo £20m–£30m, casinos £15m–£20m, interactive £3m–£5m and other £2m–£3m.